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Success Strategies for Wholesale and Distribution Companies in the SME Market

How the current economic situation can be leveraged to help you achieve your goals

Sunday, March 4, 2018

Richard Duffy

As a small or mid-size business with a focus in the wholesale distribution industry you may be considering how the current economic situation can be leveraged to help you achieve your goals. After all, it seems that in the larger enterprise space where industry players measure revenues in tens or hundreds of millions of dollars there is no shortage of activity, growth and innovation.

It’s worth looking at what some of the key drivers are across the industry and how you can leverage these although maybe at a smaller scale.

Strategy before Tactics (usually)

We often talk about the idea of strategy before tactics but often the tactics being executed by competitors or at least similar businesses can provide guidance on where the opportunities may exist for us in the SMB space.

For example a recent report from a large top tier accounting and consulting firm noted that many businesses in the wholesale distribution industry are currently grappling with tactical questions around things like acquisitions, brand and/or product range expansion, managing margin erosion and wrangling selling, general and administrative expenses (also known as SG & A).

It will no doubt not come as a surprise to many of you reading this that for many of these organisations the answer lies in technology and the better usage of information that exists not only inside the business but in the broader market.

Asking the right questions

There’s a good chance that as small or mid-size businesses we can leverage the same strategies for our benefit by asking comparable questions such as:

1. What is digital transformation and how do I plan for, deploy and use the recent technologies people are talking about

2. What are the new business models that digital technologies can enable that I can deploy cost effectively in my business.

3. How much should I worry about disrupting my current business model and importantly by not disrupting my business am I missing opportunities to better engage my current customers and importantly add new ones.

Making a start

To get started down this path there a couple of key areas where it makes sense to begin the evaluation of what is currently happening inside your business.

The one thing that I have seen time and time again is that organisations constantly look outwards for answers particularly when it comes to technology when existing investments that they have already made can potentially be used to address these challenges with little or no additional spend.

From a practical perspective, I would advise that as step one in the process you take the time to review and understand what is currently happening with the technology that you have already deployed – whether that involves speaking with the organisation that sold that technology to you or reaching out to a third-party consultant to help drive that review.

A fitting example of this is for organisations that utilise one of the most popular ERP solutions from the global software provider SAP - SAP Business One.

For many of these companies that overall fit in to the small and mid-size business space, they’ve done an excellent job of utilising the logistics and inventory management functionality that is built into the solution.

Unfortunately, many of these organisations when they look to the next step in automating their operations by implementing more detailed warehouse management solutions, they forget to look at what can be done by building onto the current solution with additional components.

Part of the reason for this is that in many cases the information about what is available isn’t always forthcoming and often the right information does not make its way into the hands of decision-makers.

My goal with this series of articles, videos and white papers is to help you understand what your options are, what the innovative technologies are all about (in plain English) and provide a resource for you to refer to as you look at digital transformation and how it can benefit your wholesaler distributional business in a cost-effective and revenue positive way.